Last month, we spoke to the managing partner of a Top 50 CPA firm in New York that recently took on private equity.
Since then, their managing partner has consistently been asked: “How did you get that deal?”
It was a clean, well structured deal. A minority investment, no preferred equity, limited dilution and the managing partner is still in control and running the firm. The kind of structure most firms would want if given the option.
What was clear in this case was that most of the operating structure was already in place before the investment arrived.
The Firm Before Private Equity
The firm had already spent years building their business.
Over roughly eight years, they grew from about $25M to $130M in revenue through consistent execution and a revenue model that held as they scaled.
More importantly, the firm was already operating at a different level internally.
Before private equity, they were generating close to $150K in revenue per employee across the entire firm, including non-billing staff. That level of efficiency is difficult to maintain at scale and it tends to show up only when the underlying structure is working.
The Efficiency Gap
Most firms operate around: $90K–$110K revenue per employee
The firms that consistently attract premium deals: $150K+ revenue per employee
What starts to show up is not just a busy practice but a more profitable and scalable business.
And to be clear, firms operating at this level are not necessarily pushing people to the burnout edge. In many cases, they have simply removed inefficiencies that other firms continue to tolerate.
The Metric Behind the Outcome
What stood out most in the conversation was how performance was being measured. The starting point was not EBITDA, at least not in the way most firms would expect. It was revenue per employee.
At a certain scale, that metric becomes harder to manipulate and much more reflective of how the business is actually running. It captures pricing discipline, client mix and the way the team is structured, in a way that surface-level profitability often does not.
In a separate conversation with another highly profitable independent firm in New York, the same thinking came up again.
Their acquisition strategy begins with a similar filter, looking for firms generating around $100K per employee, usually at a minimum of $5M in revenue. At smaller firms, that level of efficiency can be easier to achieve but once a firm grows beyond the $5M revenue mark, that metric starts to become a much clearer signal.
What the Economics Look Like
When the underlying system holds, the economics usually follow.
In the case of this Top 50 firm, average equity partner compensation post funding is around $1.6M because the underlying structure was strong enough to support it.
Even after the transaction, the firm continues to operate at a high level, maintaining roughly $150K per employee across the full team. That kind of consistency is what buyers tend to respond to.
Why Most Firms Don’t Get This Deal
A lot of firms are now trying to replicate outcomes like this and the conversation almost always starts in the same place with structure, valuation and who the capital partner was.
What stood out in this case is that very little needed to change when capital showed up.
- The team was performing at a high level.
- The system was holding as the firm scaled.
- And the growth story did not need to be heavily explained because it was already visible in the numbers.
Just as important, the firm was still clearly led.
Even through the transaction, the managing partner negotiated and maintained full control of the business. More importantly he had the confidence to push back where needed. Not in a performative way but in a way that made it clear he understood exactly how the firm would grow and was not willing to reshape it to fit someone else’s model.
That matters more than most people think.
Private equity is not only underwriting the growth of a business; it is also underwriting the person leading it. In this case, they had conviction that he could continue building in the direction they were already buying into.
That changes the dynamic of the conversation. Instead of negotiating around what the business might become, you are operating from a position where both the system and the leadership are already proven and aligned with the growth expected after funding. That is a much harder position to replicate than most firms realize.
What We’re Seeing Now
Larger firms are starting to move down market for their acquisitions, sourcing in the $5M–$10M revenue range, where opportunities are still available and pricing is more manageable. At the larger end of the market, competition has pushed valuations to levels that are harder to justify, often with less control over whether a deal actually closes.
At the same time, more firms are asking how outcomes like this happen. The answer usually has less to do with the acquisition capital itself and more to do with what was built long before it arrived.
Final Thought
The firms that achieve outcomes like this are rarely chasing the deal itself. More often, they have already built the kind of business that makes the deal possible on their terms.
That is usually what buyers are responding to before the term sheet ever shows up.
At RSSL Mergers, we regularly speak with firms and leadership teams across North America to share insights that help firms think more clearly about acquisition strategy, buyer expectations and what tends to shape the strongest deals.
